TORONTO – Gains in the energy, gold and metals sectors helped lift the Toronto stock market higher to kick off the trading week Monday.
The S&P/TSX composite index added 43.04 points at 14,598.45, making up some lost ground on Friday when the market shed more than one per cent.
The Canadian dollar fell 0.37 of a U.S. cent to 73.80 cents US.
South of the border, investors seemed to be taking a breather following the strong rally in the wake of last week’s American election that saw Republican Donald Trump win the presidency.
The Dow Jones industrial average climbed 21.03 points at 18,868.69 to hit a new record and finish higher for a sixth straight session.
The broader S&P 500 fell 0.25 a point to 2,164.20, while the Nasdaq composite lost 18.71 points at 5,218.40.
Canadian markets strategist Craig Fehr said there continues to be a broad sense of optimism in equity markets as investors view the Trump victory as a scenario that would lead to more infrastructure funding and less regulation over banks and health care.
“For the past six to seven years, it’s been a recovery defined by subpar GDP growth. What markets have responded to is the potential for policy to become more of a tailwind than headwind,” said Fehr, who works at Edward Jones in St. Louis.
Even though markets continue to climb, he cautioned there will continue to be volatility until investors can gain confidence that Trump will carry out on his pro-market campaign promises.
Commodity markets were mixed as the December crude oil contract dipped nine cents to US$43.32 per barrel, as worries continued over whether OPEC will agree to an output deal that cuts production.
The 14-member cartel consented to a pact in principle in September, as part of a concerted effort to limit oil production and support oil prices. It promised that more details of the plan will be revealed at its next official meeting on Nov. 30.
OPEC members, which include Saudi Arabia and Iran, continue to pump record amounts of crude despite declining oil prices.
The price of oil has fallen sharply since mid-2014, when it was over US$100 a barrel, dropping below US$30 at the start of this year.
It’s unclear if a supply cut will help boost oil prices, or if non-OPEC nations will pick up the slack.
Fehr said those answers are more in limbo now that Trump, who supports pro-energy policies, is the leader of the world’s largest economy.
“The economic incentive for many of these producers is to run production as high as possible. If prices are low, you have to make it up with volume. I’m not surprised at all to see some potential potholes in this road to OPEC trying to rein in production,” he said.
In other commodities, the December gold contract fell $2.60 to US$1,221.70 per ounce, December natural gas gained 13 cents at US$2.75 per mmBTU, and December copper contract gained a penny at US$2.52 per pound.
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